The FBI, in what is believed to be the biggest industrial espionage case ever, yesterday charged 18 men, including several high-ranking executives of Hitachi Ltd., the Japanese electronics giant, with paying an undercover agent $648,000 to steal technical data on new International Business Machines Corp. computers.
The FBI announced that it had arrested six men in California and obtained warrants for 12 others, most of them Hitachi executives based in Japan.
"We've named 12 people in the indictment that are pretty top management in that corporation," said John Gibbons, chief of the criminal division in the U.S. attorney's office in San Francisco. "They're very high-level people in the company." Hitachi, one of Japan's largest makers of computers, has been aggressively expanding into the American data-processing market in the past few years and has recently emerged the leader in some areas of computer technology, according to computer industry analysts.
The other men named in the complaint are officials of other Japanese electronics companies competing in the U.S. computer market. The FBI and an IBM spokesman said that none of the computer giant's employes were believed to be involved. IBM cooperated with the investigation, providing "excellent assistance," FBI Director William H. Webster said.
Officials of Hitachi and the other companies allegedly involved in the espionage could not immediately be reached for comment.
Gibbons said the investigation, which began in November, was continuing.
The arrests yesterday came after the six men, three of them Hitachi employes, paid the undercover agent $500,000 for technical data on IBM computers. The transaction followed an earlier payment of $122,000, for which he actually turned over some documents provided to the FBI by IBM.
The indictment also includes another case in which the agent was paid $26,000 by employes of Mitsubishi Electric Corp. for other IBM information. The FBI said the Mitsubishi employes became involved in the case in January, and apparently were not aware that Hitachi was allegedly seeking similar information.
The FBI said it first became aware of the alleged espionage last November, when a confidential source told it the Japanese companies were interested in obtaining the IBM technology. FBI spokesman Tom Anderson said the source then acted as a middleman, introducing the Japanese businessmen to an undercover agent who offered to provide the information for a price. Other undercover agents apparently were also used in the case.
IBM, in a brief statement yesterday, said it became aware of the espionage attempt at about the same time and contacted the FBI. "There was some information that came to our attention almost simultaneously when we were approached," Gibbons said.
According to the indictment, the information desired by the Japanese included design information on IBM's 3081 computer, a recently introduced model that is the company's largest; data on IBM's 3380 memory-disc-storage unit; microcode used to program computers; and "architecture" on IBM circuit boards, which Gibbons likened to blueprints for computer design.
Gibbons said the Japanese apparently hoped to drastically reduce the time needed to catch up with the new IBM designs. "Instead of wasting time doing reverse engineering, they will in turn be ready to proceed and manufacture and compete extremely expeditiously," Gibbons said.
"It's safe to say the value of the technology and equipment involved they were seeking goes into the millions and millions of dollars," Anderson said. "It's definitely one of the largest cases of its kind ever handled by the FBI." Gibbons said he did not know of any larger industrial espionage case handled on the federal level.
"This was a classic example of the value of an undercover operation designed to ferret out the theft of high technology," Webster said.
Gibbons said the indictments covered officials of all three of Hitachi's main computer works, or divisions. Among those indicted were the general manager of Hitachi's Kanagawa works in Japan, the deputy general manager of the company's Odawara works, and other executives of the company bearing titles such as department manager and senior engineer.
"I can't say they were representing the companies, but we were dealing with people that were employes of these companies," Anderson said.
The men arrested in California yesterday were Kenji Hayashi, senior engineer, from Hitachi's Kanagawa works; Isao Ohnishi, section manager, from Hitachi's software works in Japan; Kunimasa Inoue, a programmer for Hitachi America Ltd. in San Francisco; Keizo Shirai, section manager for Nissei Electronics Ltd. in Japan; Takaya Ishida, of Mitsubishi Electronics America Inc. of Compton, Calif., and Tom Yoshida, president of NCL Data Inc., of Santa Clara, Calif.
The six men were charged with conspiracy to transport stolen property, a felony with a maximum penalty of five years in prison and a $10,000 fine.
The 12 men still sought, nine of whom work for Hitachi, all reside in Japan.